VAT for UK Online Sellers
By Selling Fee Tools team ·
VAT affects a UK online seller twice: on the sales you make, if you’re registered, and on the fees marketplaces charge you. This guide covers both, using GOV.UK and each marketplace’s UK fee pages, checked in October 2026. It isn’t tax advice; check your own position with HMRC or an accountant.
The rates
- Standard rate, 20%: most goods and services.
- Reduced rate, 5%: some goods and services, for example children’s car seats and home energy.
- Zero rate, 0%: for example most food and children’s clothes.
When you have to register
- You must register if your taxable turnover for the last 12 months goes over £90,000, or you expect it to in the next 30 days.
- Businesses based outside the UK that supply goods or services to the UK must register whatever their turnover.
- You can register voluntarily below the threshold.
Working out the VAT in a price
- Adding VAT at 20%: multiply the price before VAT by 1.2. £50.00 + VAT is £60.00, with £10.00 of VAT.
- Removing VAT from a VAT-inclusive price: VAT is one sixth of it. £60.00 contains £10.00 of VAT. Taking 20% off £60 would give the wrong answer, £48.00.
The UK VAT calculator adds or removes VAT at any rate, one price or a whole list.
VAT on marketplace fees
Marketplaces charge fees on every sale, and how VAT applies to them differs:
- Amazon and eBay (business sellers) quote fees excluding VAT. UK sellers who aren’t VAT-registered pay 20% on top; registered sellers usually reclaim it.
- Etsy charges 20% VAT on its fees to UK shops that haven’t added a VAT ID, and stops once you add one.
- TikTok Shop UK quotes its commission including VAT.
- eBay private sellers’ fees include VAT, and they pay no final value fee on UK sales.
What registration does to a sale
A £25 item with £3.50 postage on eBay, business seller, most categories:
| Not VAT-registered | VAT-registered | |
|---|---|---|
| eBay fees | £4.18 + £0.84 VAT = £5.02 | £4.18 (VAT reclaimed) |
| VAT owed on the sale | — | £28.50 ÷ 6 = £4.75 |
| Kept before your costs | £23.48 | £19.57 |
Registering lets you reclaim VAT on fees and costs, but you owe VAT on your sales, so on prices that include VAT a registered seller keeps less of each sale.
Work out your own numbers
- UK VAT calculator
- Amazon UK, eBay UK and Etsy UK fee calculators, each with a VAT-registered option
- Selling online in the UK: fees compared
Sources: GOV.UK VAT rates and VAT registration pages, and each marketplace’s UK fee pages, listed on each calculator and on our methodology page.